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RED-437 Assignment #4 – Due Friday, 06/11/2021 @ midnight

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RED-437 Assignment #4 – Due Friday, 06/11/2021 @ midnight. Grading This Assignment grade is worth 15 points. Full points will be awarded for successful attempt and completion of the assignment. Late submissions, up to 1 week beyond due date, will be accepted for partial credit only (12 points). Submitting Your Work Upload your excel workbooks under Cases and Assignments -> Assignment 4 – TURN IN HERE. Please name the file as follows: "437_A4_[student last name]_Date[xxxx.xx.xx]" This is the RED course number, underscore, A4 for Assignment #4, underscore, your last name, underscore, and date turned in (using the format YYYY.MM.DD). Percentage Rent Calculation Recall that many Class A retail leases use a concept of “percentage rent,” especially in large shopping malls or multi-tenant retail centers. In this exercise, you will compare two percentage rent lease alternatives – Option 1 using an Artificial Breakpoint, and Option 2 using a Natural Breakpoint. Revenue Forecast January February March April May June July August September October November December $100,000 $80,000 $70,000 $75,000 $95,000 $95,000 $85,000 $100,000 $110,000 $120,000 $130,000 $140,000 Percentage Rent Lease Alternatives Base Rent Premises $10/sf/yr 5,000 sf Option 1 – Artificial Breakpoint Percentage Rent 5% Breakpoint $800,000 Option 2 – Natural Breakpoint Percentage Rent 6% Breakpoint natural 1) Getting Started Start by reviewing the Video Lecture: Commercial Leasing – Pt 2 and Excel Tutorial – Percentage Rent. Next, set up your own percentage rent calculation for each lease alternative. 2) Answer the following questions in a text box inside of the excel model. 1. What are the percentage rents of each lease option? 2. Do you prefer the artificial or the natural breakpoint? Why?